Computer Application

in
Business Accounting

Rasananda Mohanty
(MBA, TCP, ICB & TDL Certified),
Visiting Faculty,
Ravenshaw University, Cuttack,
Xavier University, Bhubaneswar, Odisha.

Dr. Sanjay Kumar Satapathy

M.Com., ICWAI (Inter), PGDCA, Ph.D.
Dean, Commerce and Management Studies
Dean, Students Welfare,
Ravenshaw University, Cuttack, Odisha.

MUMBAI  NEW DELHI  NAGPUR  BENGALURU  HYDERABAD  CHENNAI  PUNE  LUCKNOW

 AHMEDABAD  ERNAKULAM  BHUBANESWAR  KOLKATA  GUWAHATI
© Authors
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 Dedicated to
My Loving & Respected Grandfather

Mr. Anadi Charan Mohanty

Rasananda

Revered Baba Buddhanatha Das of

Garoi Ashram,
Jagatsinghpur Dist. Odisha
Sanjay
 Preface
Computer Application in Business Accounting refers to the application of
different tools and techniques of information technology in the day-to-day business
activities. In present scenario, every business activities are stored and processed by
computers. Activities like online shopping, e-procurement, e-banking, net banking,
SMS alert, are carried down by the use of information technology. While using
computer as an important tool of business organization, it is very much important for
all internal stakeholders to understand the computer architecture and various tools
related applied for the benefit and development of business activities. The commerce
students are the budding entrepreneurs of the future.
The present book attempts to cover the application of computer in different
functional units of the business organization. The techniques applied in financial
accounting, inventory management, audit process, remote access, tax computation,
tax filing, payroll system, etc. We have tried to the best of our effort to include
application of computer in other areas like computer network, resource sharing,
protecting IT infrastructure, doing online transactions, making online payments, etc.
The major part of this book focuses on the application of Tally.ERP9 (computerized
accounting) and its different technologies in business. We have tried to make the
book simple and easily understandable with step by step methods but still all useful
suggestions would be welcome along with constructive and healthy criticism for the
improvement of the book.
The book is structured broadly in two parts, i.e., first part is regarding computer
architecture and its application in business and e-commerce. The second part is
computerized accounting package and its outcome. We have utilized the resources
like articles, e-learning materials and video tutorials of renowned authors available
in web.
We are extremely thankful to our colleagues, family, students and Himalaya
Publication House Pvt. Ltd. for motivating us to write this book to cater the needs of
the students of Commerce in the field of Information Technology.
This book is designed for the students of B. Com., M. Com., BBA and IMBA
students. Business Organisations using Tally.ERP9 to maintain their accounts and
inventories will also be benefited. Tally.ERP9 professional can take the advantage of
this book.
We hope this book on “Computer Application in Business Accounting” will
receive a warm response from our readers.

Rasananda Mohanty
Dr. Sanjay Kumar Satapathy
 Contents
1. Familiarizing with Personal Computer, Computer Architecture, 1 - 39
Components

History of Computers, Generation and Classification of Computers,

Components of Computer System. Hardware, Software, Types of Software,
Programming Language, Types of Monitors, Printers, Keyboard and Mouse,
Operating System, Types of Operating System, Role and Functions of
Operating System, Computer Memory, Microprocessor, Central Processing
Unit, CPU Architecture

2. Computer Networks, WWW, E-commerce, Computer Virus, 40 - 140

ERP, DBMS, Cybercrime

Introduction to Computer Network, Components of Network System, Local

Area Network, MAN, WAN, etc., TCP/IP, Internet, Intranet and Extranet,
e-Mail, Websites, Computer Virus and Antivirus, Overview of
e-Commerce, Database Management System (Overview), Enterprise
Resource Planning (ERP) Overview, Cybercrime – The Concern of the
Time

3. Computerized Accounting and Tally.ERP 9 141 - 156

Manual System of Accounting vs Computerized Accounting, Computerized

Accounting Software and its Need. Types of Computerized A/c Software.
Qualities of the Best Accounting Packages. Introduction to Tally.ERP9.
History, Characteristics, Advantages of Tally.ERP9, Technological
Benefits, Tally.ERP9 Version and Release, Tally.ERP 9 Single User,
Multiuser, System Configuration to Install Tally.ERP9, Procedure of
Installation and Activation of Tally.ERP9. Procedure for Upgradation from
a Lower Version or Release to Higher Version. Introduction to Tally.ERP9
Screen, Components of Tally Screen, Company Creation, Alteration and
Deletion, Password Protection. Tally Vault, F11 and F12 Configuration

4. Feature and Configuration, Accounts and Inventory System, 157 - 187

Vouching, Import and Export

Predefined Primary Groups, Subgroups, Ledgers, Creation, Alteration and

Deletion of Groups, Creation, Alteration and Deletion of Ledgers,
Introduction to Inventory System, Stock Group, Stock Category, Stock
Item, Godowns, Units of Measure, Alternate Unit, Standard Cost and
 Standard Selling Rate, MRP for Stock Items, Vouchers, Accounting
Vouchers, Accounting Voucher Recording Process, Invoicing, Voucher
Types Creation, Daybook Management, Voucher Filter, Bill-wise Details,
Cost Centre, Backup and Restore, Auto Backup, Voucher Printing, Trial
Balance. Ledger Statement, Import and Export of Tally Data

5. Inventory and Pure Inventory Vouchers, Invoice Print, 188 - 229

VAT and CST Transactions, Inventory Management Techniques

Inventory and Pure Inventory Vouchers, Preparation of Purchase Order,

Sales Order and Other Inventory Vouchers, Order Processing, Recording of
Purchase, Sales Transactions, Purchase Return, Sales Return, Voucher
Class, Additional Cost of Purchase, Value Added Tax (VAT), Interstate
Purchase and Sale (CST), Point of Sale (POS), Bill of Material,
Manufacturing Journal, Price Levels, Free Goods, Zero Valued Entries,
Trade Discount, Cash Discount, Inter-godown Transfer, Inter-branch
Transfer, Interstate Branch Transfer, Different Print Formats of Sales
Invoice, Interest Calculation

6. TDS, Banking, Tally Audit, Statutory Return, e-Return, Remote 230 - 263
Access, Accounting and Inventory Reports, Statutory Reports,
Security Control, Data Split, Printing Utility

Tax Deducted at Source (TDS), Master Configuration for TDS, Sample

Transactions of TDS, Bank Reconciliation, Cheque Printing, Payment
Advice, Bill Settlement, Bills Receivable and Payable, User Type Security
Control, Remote Access, Data Split, ODBC Connectivity, Tally Audit,
e-Mail from Tally. Display and Printing of Reports, Financial Reports,
Inventory Reports and Statutory Reports of VAT, CST and TDS
 Chapter 1

 Familiarizing with Personal

Computer, Computer Architecture,
Components

“Computers are incredibly fast, accurate and stupid; humans are incredibly slow,
inaccurate and brilliant; together they are powerful beyond imagination.” ― Albert Einstein
From the first programmable computer ‘Difference Engine’ in 1822 by the English
mathematician and philosopher, Charles Babbage through Electronic Discrete Variable Automatic
Computer (EDVAC) and Electronic Numerical Integrator and Computer (ENIAC) by John Presper
Eckert and John William Mauchly in 1946 to the present day, COMPUTERS have come a long way.
It’s almost impossible to imagine that someone can live without computers in the present day world.
The importance of computers in our daily lives can be judged by the number of people using them
each single day and the growing populace bracketed as users.
Computer is an electronic device used in almost every field even where it is most unexpected.
That is why this age is called as the era of IT and now we cannot imagine a world without computers.
These days computers are the tools for not only students, professionals, engineers and scientists, but
also they are being used by millions of people around the world including little children and grown-
ups at our homes.
Computer has now become an integral part of corporate life. The most that any industry has
gained from the discovery of the computers is the smooth business operations and time management
because of its nature. Computers have occupied significance as they have improved the efficiency,
effectiveness and productivity of work process. Large amounts of information in industrial and
business sectors as well as in the personal lives are stored and processed on computers.
Today computers can be found in every Institution, supermarkets, restaurants, offices etc. special
software is used in these computers to generate huge bills within seconds. One can buy and sell things
online, bills and taxes can be paid online and can also predict the future using artificial intelligence
software. It also plays a very important role in the stock markets. Computers can secure better jobs
prospects. Knowledge about computer is a must in this time.
“I wonder who had the first computer dream, where, and when? I wonder if computers
ever dream of humans.” ― David Mitchell
2 Computer Application in Business Accounting

Keyboard Monitor

CPU
Mouse Printer

Other input Speaker

Data Information

Ram
Other input Other output
HDD CD

Memory

The above picture represents the complete architecture about the working of a computer. Readers
are advised to keep the blue print of this picture till the completion of first unit. The components
described are explained in detail later on.

Computer
A personal computer (PC) is usually a microcomputer whose price, size, and capabilities make it
suitable for personal usage. The term was popularized by IBM marketing. A computer is a general
purpose device which can be programmed to carry out a finite set of arithmetic or logical operations.
Since a sequence of operations can be readily changed, the computers can solve more than one kind of
problem. Conventionally a computer consists of at least one processing element and some form of
memory. The processing element carries out arithmetic and logic operations, and sequencing and a
control unit that can change the order of operation based on stored information. Roughly a computer
consists of input device, output device, processing device, communicating and storage device. Most
people assume computer as a calculating device in earlier days but it is much more than that in present
scenario. Now a day we feel the presence of computer in each of our day to day activity. The
technological enhancement has made the use of computer and computer literacy more familiar. The
business complexity and competition, the statutory obligations and the profit maximization objective
have created a strong platform for the information technology to be considered as an important tool. In
present scenario taking right decision in short time is a tough challenge for the entrepreneurs. So it is
very much important for every entrepreneur to know the importance of computer and the business
management software available in market.
A computer may be defined as a machine that can solve problems by accepting input data from
the user, performing certain operations and presenting the results of those operations according to the
direction or command or set of instructions. Computer science is the study of the operating principles
of computers, computer programming languages and algorithms for solving theoretical as well as
practical problems. It involves the development and use of devices for processing information.
Familiarizing with Personal Computer, Computer Architecture, Components 3

Abacus
This is the first recorded computer, whose existence dates back 2500 B.C. The mechanical
calculating device Abacus was principally used to add and subtract. Nearly 5,000 years ago the abacus
emerged in Asia Minor. The abacus may be considered the first computer.

Pascalein
In 1642, Blaise Pascal invented Pascaline, it is a brass rectangular box, used eight movable dials
to add sums up to eight figures long. But it was only capable of performing additions and subtractions.
Multiplication and division operations were carried out in terms of addition and subtraction.

Difference Engine
A young genius named Charles Babbage, an English mathematician gave much thought to the
design of a device that used the differences between previous values in a table to produce new values.
In 1822, he constructed the “Difference Engine”.

Analytical Engine
In 1833, Charles Babbage developed the Analytical Engine. This machine consisted of five
functional units such as Input unit, Memory unit, Arithmetic unit, Control unit and Output unit and
hence, Charles Babbage is called the Father of Computers.

ENIAC (Electronic Numerical Integrator and Calculator)

After introducing Semiconductor technology in 1946, they developed first ever electronic
computer ENIAC. It is an acronym for Electronic Numerical Integrator and Calculator. This was able
to carry out 5000 additions per second.

EDVAC (Electronic Discrete Variable Automatic Computer)

To overcome the disadvantage in ENIAC, Neumann proposed a new concept of a large internal
memory to store instructions and data. This is known as Stored Program Concept. The first ever
computer developed on this principle. It is an acronym for Electronic Discrete Variable Automatic
Computer.

Generation of Computers
A generation refers to the state of improvement in the development of the product. This term is
also used in different advancements of computer technology. The generations of computers are
broadly classified into:
1. Non-electronic Generation
2. Electronic Generation

Non-electronic Generation
This generation is also called as Zero Generation of Computers. These are made up of wooden or
mechanical components. Ex: Abacus, Napier’s bones etc…
4 Computer Application in Business Accounting

Electronic Generation
Computers built with electronic circuitry are called the electronic generation of computers. They
are divided into 5 generations.
First Generation of Computers
These were developed during 1940-1956, and were built with Vacuum tubes. Some authors
assumed the developed period as 1951-1959. First generation computers relied on machine language
understood by computers, to perform operations, and they could only solve one problem at a time.
Input was based on punched cards and paper tape, and output was displayed on printouts. The
UNIVAC and ENIAC computers are examples of first-generation computing devices. These
computers used vacuum tubes joined with copper wires. These computers were very bulky and
required huge electric power, maintenance and space for their installation. The first generation
computers were of low capacity and internal storage.
Second Generation of Computers
These were developed during 1956-1963, and were built with Transistors. The transistor was far
superior to the vacuum tube, allowing computers to become smaller, faster, cheaper, and more reliable.
Second-generation computers moved from machine language to assembly, languages, which allowed
programmers to specify instructions in words. High-level programming languages were also being
developed at this time. The use of transistors made these computers more reliable than first generation
computers. The use of magnetic cores as the primary internal storage medium and the introduction of
removable magnetic disk pack were other major developments of the second generation computers.
Data transmission from one computer to another computer was possible in this generation.
Third Generation of Computers
These were developed during 1964-1971, and were built with Integrated Circuits (ICs). The
development of the integrated circuit was the hallmark of the third generation of computers. Instead of
punched cards and printouts, users interacted with third generation computers through keyboards and
monitors and interfaced with an operating system. Computers for the first time became accessible to
normal users because they were smaller and cheaper. The integrated circuits enhanced the processing
capability, improved the speed of the computer. The technology of Small-scale Integration (SSI) and
Middle Scale Integration (MSI) were incorporated in this generation. The first commercially available
minicomputer was introduced in 1965. High level programming languages were used by these
computers.
Fourth Generation of Computers
These were developed during 1972-1990 and were built with Micro Processors. The development
of the microprocessor chip, which contains an entire Central Processing Unit (CPU) on a single silicon
chip led to the mushrooming growth of inexpensive computers. New powerful languages were
developed to broaden the use of multiprogramming and multiprocessing which brought about a major
shift from batch processing to online processing as well as remote interactive processing. In 1981 IBM
introduced its first computer for the home user. As these small computers became more powerful, they
could be linked together to form networks, which eventually led to the development of the Internet.
Fourth generation computers also saw the development of GUIs, the mouse and handheld devices. The
Familiarizing with Personal Computer, Computer Architecture, Components 5

use of Very Large Integrated Circuits (VLIC) had made the fourth generation (micro) computers very
compact, much less expensive, faster, more reliable and with a much greater data processing capacity
than third generation computers.
Fifth Generation of Computers
These were developed since 1998. The development of super computers was the key motivation
of the fifth generation computers. The goal of fifth-generation computing is to develop devices that
respond to natural language input and are capable of learning and self-organization. The concept of
“Artificial Intelligence” is being used in these computers and the Japanese called them “Knowledge
Processors”. Automatic programming, computational logic, pattern recognition and control of robots
(robotics), the processes needing skill and intelligence are examples of artificial intelligence. These
computers processed data in billions per second.

Classification
The computers are classified based on following parameters. They are classified on the basis of:
1. Data Handling
2. Purpose
3. Size/Application
4. Generation/Technology (Discussed above)

Based on Data Handling

Computers are classified into following types on the basis of data handling.
1. Analog computer
2. Digital computer
3. Hybrid computer
Analog Computer
Analogous is the Greek term which means “symbol” or “signal”. A form of computer that uses
continuous physical phenomena such as electrical, mechanical or hydraulic quantities to model the
problem being solved. They solve problem by translating physical conditions such as flow,
temperature, pressure, angular position or voltage into related mechanical or electrical related circuits.
Digital Computer
A computer that performs calculations and logical operations with quantities, numerical or
otherwise, represented as digits, usually in the binary number system Digital computer represents
physical quantities with the help of digits or numbers.
Hybrid Computer
A combination of computers those are capable of inputting and outputting in both digital and
analog signals. A hybrid computer system setup offers a cost effective method of performing complex
simulations.
6 Computer Application in Business Accounting

The hybrid system provides the good precision that can be attained with analog computers and
the greater control is possible with digital computers, plus the ability to accept the input data in either
form.

Based on Purpose
Computers are classified into following types on the basis of purpose.
1. General Purpose Computers
2. Specific Purpose Computers
General Purpose Computers
General purpose computers are designed to solve a large variety of problems. The different
programs can be used to solve many problems. Most digital computers are general purpose computers
and used in business and commercial data processing.
Specific Purpose Computers
A computer designed for machine control or process control would be different than a general
purpose computer. The special purpose computers are designed to solve specific problems. The
computer program for solving a specific problem is built right into the computer. Most analog
computers are special purpose computers. These special purpose computers are widely used in
industrial robotics.

Based on Size/Application
Computers are classified into following types according to size.
1. Super Computers
2. Mainframe Computers
3. Mini Computers
4. Microcomputers
Super Computers
Supercomputers are the fastest computers available at any given time and are normally used to
solve problems, which require intensive numerical computations. Weather forecasting, nuclear
research, fluid dynamics, scientific research, astrophysics are the areas of application of
supercomputers. These computers are extremely expensive and its speed is measured in billions of
instructions per second or floating point operations per second.
Mainframe Computers
Mainframes are the second largest of the computer family. These computers are capable of
handling and processing large amounts of data quickly. They are capable of supporting large volumes
of data processing, on line transaction processing, high volume of database management, Govt. Sector,
Banks, Insurance, Airways, Railway, Medical, etc. Their speed is measured in millions of instruction
per second.
Familiarizing with Personal Computer, Computer Architecture, Components 7

Mini-computers
These computers fall in between mainframe and microcomputers. These computers have less
storage capacity with low speed of processing. These are capable of supporting 4 to 200 users
simultaneously. They are used in research organization, universities, etc.
Micro-computers
A microcomputer is the smallest, least expensive among all the computers. The difference
between microcomputers and mainframe or minicomputers is that microcomputers have smallest
memory and less power, physically smaller and permit fewer peripherals to be attached. Examples -
Desktop, laptop, PDA, tablet PC, Smartphone, Palmtop, etc. A microcomputer is the smallest, least
expensive of all the computers.
Servers and Workstations
Server is a physical computer dedicated to run one or more such services to serve the needs of
users of other computers on network. The server may be a Database server, file server, mail server,
print server, web server etc. A workstation is a high end microcomputer designed for technical or
scientific applications. High performance graphics card, Powerful CPUs and a large number of
memory are present in server machines.

Characteristics
A few notable characteristics of computers are as follows.
Speed: The computer was initially invented as a very high speed calculator. The speed varies
from a few microseconds (millionth of a second) to nanoseconds (billionth of a second).
Millisecond (KHZ) - a thousandth of a second. (Kilo Hertz)
Microsecond (10-6 Sec, MHZ) - a millionth of a second. (Mega Hertz)
Nanosecond (10-9 Sec, GHZ) - a billionth of a second. (Giga Hertz)
Picosecond (THZ) - a trillionth of a second. (Tera Hertz)
Storage: Computer has mass storage section where we can store large volume of data for future
work. Such data can easily be retrieved from the secondary storage devices like floppy disk (Fdd),
hard disk (Hdd), compact disk (CD), Digital Versatile Disk (DVD), Blue Rays, memory card and pen
drive etc.
Accuracy: Though the computer does its work with a very high speed, it does not make any
mistake unless the user gives it a wrong instruction. Computers are 100% accurate. But if we feed
wrong data to the computer, it returns the same wrong output or information called GIGO (Garbage in
garbage out).
Reliability: Since computer can do its work very fast, without making any mistake and without
taking rest and is able to store data for future use, it is a very reliable or trustworthy machine.
Versatility: It means the capacity to perform completely different type of work. You may use
your computer to prepare payroll slips. Next moment you may use it for inventory management or to
prepare electric bills.
8 Computer Application in Business Accounting

Diligence: Computers can work for many hours continuously without taking any rest and without
decreasing its speed, accuracy and efficiency. It is free from tiredness, lack of concentration, fatigue. If
millions of calculations are to be performed, a computer will perform every calculation with the same
accuracy.

Limitations
The followings are the limitations of computers.
1. They are failure prone. A failure in a nuclear power station or defense or airlines can
endanger many lives and resources.
2. They don’t have their own thinking power.
3. The output generated is solely dependent on the mode and genuineness of the input.
4. Discarded computers are real junk and consume a lot of space.

Application of Computer
Today computer has become essential part of life. In every job the involvement of computer may
be directly or indirectly is felt. The followings are the areas where computer is used to get the
maximum benefit.
1. Education and Research Work
2. Medicine and Health Care
3. Business and Industry
4. Production and Marketing
5. E-Governance
6. Internet, Online Shopping and Cloud Computing
7. Entertainment, Movie, Sound, Animation
8. Railway, Transport, Airway
9. Banking & Insurance
10. Legal Practice, Audit and Law Enforcement
11. Defence and Nuclear Space Research
12. Traffic Control, Sports and Astrology

Components of Computer System

The computer system has four components or elements. These elements make the computer
workable.
1. Hardware
2. Software
3. Data
4. User
Familiarizing with Personal Computer, Computer Architecture, Components 9

Hardware
The term hardware refers to the physical parts of the computer which we can see, touch and feel
the existence. The hardware components occupy certain space. The hardware can be divided into
following types
1. Input devices
2. Output devices
3. Processing devices and Memory
4. Storage devices
Input Devices
The input devices allow the user to communicate with the computer. Input devices accept the
instructions or data from the user in different formats. Examples of input devices are keyboard, mouse,
scanner, trackball, joystick, light pen, touchpad, etc. When we are connecting any input devices to the
computer we should ensure the specific driver required to run the device. Besides the above input
devices we may find other devices used to receive the data as input from the user. Logitech, I ball and
Microsoft are the leading manufacturers of input devices.
Output Devices
The output devices allow the user to display or to print the output generated by the computer.
Examples of output devices are monitors or VDU, printers, plotters, speakers, speech synthesizers etc.
There are different types of monitors in different sizes are available. The monitors are classified
according to the display mode, e.g., CRT, TFT, LCD and LED. In the present scenario, the CRT
monitors are discarded. Printers are used to produce the hard copy of the output. There are different
types of printers are available like dot matrix printers, inkjet printers, laser printers, DeskJet printers,
thermal printers, etc.
Processing Devices and Memory
The processing devices perform all processing activities by taking the input instruction from the
user and generate the output. Central processing Unit, registers are considered as processing devices.
Main memory unit, RAM, ROM are different types of memory which holds the processed data
temporarily.
Storage Devices
The storage devices hold the processed data permanently. Hard Disk, Pen drive, memory card,
DVD, Memory card are the examples of different storage devices. The capacity of the storage devices
are measures in GB (gigabyte). Hard disk is internal storage device. HDDs were introduced in 1956 as
data storage for an IBM real time transaction processing computer and were developed for use with
general-purpose mainframe and minicomputers. The first IBM drive, the 350 RAMAC, was
approximately the size of two refrigerators and stored five million six-bit characters (3.75 megabytes)
on a stack of 50 disks. The top hard drive manufacturers are Western Digital, Seagate Technology,
Toshiba, Hitachi, G Technology, etc.
10 Computer Application in Business Accounting

Different Hardware Components within CPU BOX

Motherboard Switch Mode Power Supply (SMPS)

Spindle Head
Platter
Actuator Arm
Actuator Axis

Power
Connector
Jumper Block
Actuator LAN Card
IDE Connector
Hard Disk

Microprocessor Chip CMOS Battery

Random Access Memory

DVD Writer Processor Fan Expansion Slots

Software
As you know computer cannot do anything on its own and has to be guided by the user. In order
to do any specific job you have to give a sequence of instructions to the computer. This set of
instructions is called a computer program. Software refers to the set of computer programs, procedures
Familiarizing with Personal Computer, Computer Architecture, Components 11

that describe the programs and how they are to be used. We can say that it is the collection of
programs, which increases the capabilities of the hardware. Software guides the computer at every step
where to start and stop during a particular job. The process of software development is called
programming. You should keep in mind that software and hardware are complementary to each other.
Both have to work together to produce meaningful result. Another important point you should know
that developing software is difficult, time consuming and expensive. Computer software is normally
classified into three broad categories.
 Application Software
 System Software
 Utility Software
Application Software: Application software is a set of programs, which are written to perform
specific tasks of the users of computers such as Accounts, Stores, Payroll, etc. These software are
developed in high level language to help the user to get the computer perform the tasks. MS offices,
page maker, coral draw, Photoshop are few examples of application software. You can develop a
package to print mark sheet of every student of your college or generate accounts or to maintain
inventory of a company etc. Application software can be classified into two types: (a) Customized
Packages (b) Generalized Packages. Customized Packages: These are developed especially for the
user by a program using high-level computer languages to fulfill individual requirements. For example,
when you develop a package to prepare a status report of your college i.e., name of the students, their
addresses, Parent’s name, Fee paid, marks obtained, etc., you are developing a customized package
because the package developed for your institution may not be of any use for other institution.
Generalized Package: These packages are written for the people who have to perform common task
on a computer system. Winamp, team viewer, Oracle, MS Office, Opera, VLC player, etc., are the
names of the Generalized Packages. Any person can use these packages because they can be used for
specific application and purposes. These are meant for mass and common use. Another example of
application software is programming language.
System Software: This software is used by the computer system for functioning. When you
switch on the computer the programs stored or written in ROM is executed which activates different
units of your computer and makes it ready for you to work on it. This set of program can be called
System Software. Therefore, system software may be defined as a set of one or more programs
designed to control the operations of computer system. System Software are general purpose programs
designed for performing tasks such as controlling all operations required to move data into and out of
the computer. It communicates with keyboard, printer, card reader, disk, tapes, etc. It also monitors the
use of various hardware like memory, CPU, etc. System software acts as an interface between
hardware and application software. System software allows application packages to be run on the
computer with less time and effort. It is not possible to run application software without system
software, operating systems, device drivers, linker software are good examples of system software.
Utility Software: Utility software is system software designed to help analyze, configure,
optimize or maintain a computer. Utility software usually focuses on how the computer infrastructure
including hardware, operating system, software and data storage operates. It functions as system
software and performs the activity of application software. Antivirus, archivers, clipboard managers,
data compression, disk defragmenters, disk cleaners, registry cleaner are different categories of utility
software.
12 Computer Application in Business Accounting

Programming Language
Language is a system of communication between two persons. Some of the basic natural
languages that we are familiar with are English, Hindi, Oriya, etc. These are the languages used to
communicate among various categories of persons. But how will you communicate with your
computer. Your computer will not understand any of these natural languages for transfer of data and
instruction. So there are computer-programming languages specially developed so that you could pass
your data and instructions to the computer to do specific job. You must have heard names like
FORTRAN, BASIC, COBOL, C, C++ etc. These are programming languages. So instructions for
performing a task are written in a particular computer programming language based on the type of
output. As an example, for scientific application FORTRAN and C languages are used. On the other
hand, COBOL is used mainly for business application.
Types: There are two major types of programming languages. These are Low Level Languages
and High Level Languages. Low Level languages are further divided into Machine language and
Assembly language.
Low Level Languages
The term low level means closeness to the way in which the machine has been built. Low Level
languages are machine-oriented and require extensive knowledge of computer hardware and its
configuration.
The low level languages are:
Machine Language: Machine Language is the language of the computer and is the only
language that is directly understood by the computer. We also call it machine code and it is written as
strings of 1’s and 0’s. It is on this basis that the computer is designed. When this sequence of codes is
fed to the computer, it recognizes the codes and converts it in to electrical signals needed to run it. For
example, a program instruction may look like this: 1011000111101. It is not an easy language for you
to learn because of its complexity as it consists of 1’s and 0’s. It is most efficient for the computer as
the instructions are directly executed. It is considered to the first generation language. It is also
difficult to debug the program written in this language.
Advantage:
The only advantage is that program of machine language run very fast because no translation
program is required for the CPU.
Disadvantages:
1. It is very difficult to program in machine language. The programmer has to know details of
hardware to write program.
2. Machine language is hardware dependent.
3. The programmer has to remember a lot of codes to write a program, which results in
program errors.
4. It is difficult to debug the program.
Assembly Language: It is the first step to improve the programming structure. In this language,
the machine codes comprising of 1’s and 0’s are substituted by symbolic codes (called mnemonic
codes) to improve their understanding. The set of symbols and letters forms the assembly language
and a translator program (called Assembler) is required to translate the programs written in assembly
Familiarizing with Personal Computer, Computer Architecture, Components 13

language into machine language for execution by the computer. It is considered to be a second-
generation language.
Advantages:
1. The symbolic programming of Assembly Language is easier to understand and saves a lot of
time and effort of the programmer.
2. It is relatively easier to correct errors and modify program instructions.
3. Assembly Language has almost the same efficiency of execution as the machine level
language because this is one-to-one translator between assembly language program and its
corresponding machine language program.
Disadvantages:
One of the major disadvantages is that assembly language is machine dependent. A program
written for one computer might not run on other computers with different hardware configuration.
High Level Languages
You know that assembly language and machine language require extensive knowledge of
computer hardware. To overcome this limitation, a user writes the instructions in English like
sentences to perform the logic of the problem irrespective of the type of computer you are using. The
language used for this is referred to as high-level language. High-level languages are simple language
that use English and mathematical symbols like +, -, %, /, etc. for its program construction. You
should know that any higher-level language has to be converted to machine language for the computer
to understand. Higher-level languages are problem-oriented languages because the instructions are
suitable for solving a particular problem. For example COBOL (Common Business Oriented
Language) is mostly suitable for business-oriented language where there is very little processing and
huge output. There are mathematical-oriented languages like FORTRAN (Formula Translation) and
BASIC (Beginners All-purpose Symbolic Instructions Code) where very large processing is required.
Nowadays Python, C#, PHP, Java are commonly used high level languages. Advantages of High
Level Languages are higher-level languages are easy to learn and use. It is because that they are
similar to the languages used by us in our day-to-day life. The programs can easily be debugged and
are machine independent.
Compiler
It is a program that translates the instructions of higher-level languages to machine language. It is
called compiler because it compiles every program instruction given in higher-level languages into
machine language. Thus compiler is a program translator like assembler but more sophisticated. It
scans the entire program first and then translates it into machine code. The program written by the
programmer in higher-level language is called source program. After this program is converted to
machine language by the compiler it is called object program. A compiler can translate only those
source programs, which have been written in that language for which the compiler is meant for. For
example, FORTRAN compiler will not compile source code written in COBOL language. Object
program generated by compiler is machine dependent. It means programs compiled for one type of
machine will not run in another type. Therefore, every type of machine must have its personal
compiler for a particular language. Machine independence is achieved by using standard higher-level
language on different machines and converting them for use on specific machines through a compiler.
14 Computer Application in Business Accounting

Interpreter
An interpreter is another type of program translator used for translating higher-level language
instructions into machine language instructions. It takes one statement of higher-level language at a
time, translates it into machine language and executes it immediately. Translation and execution are
carried out for each statement. It differs from compiler, which translate the entire source program into
machine code and then involve in its execution. The advantage of interpreter compared to compiler is
its fast response to changes in source program. It eliminates the need for a separate compilation after
changes to each program. Interpreters are easy to write and do not require large memory in computer.
The disadvantage of interpreter is that it is time-consuming method because each time a statement in a
program is executed, it is first translated. Thus compiled machine language program runs much faster
than an interpreted program.

Data
Data are the raw formats of information. Data may be in any format. The data is given as input to
the system. ASCII – American Standard Code for Information Interchange.

User
Users involved in computing process can be broadly classified into end users, power users and
professionals or super users. People who operate the computers are called users or end users. The
power users are the people who work on specified task. These users have more knowledge than end
users. They customize the application according to the requirement and to generate desired output. The
professionals have in depth knowledge about the system and the architecture. They work on specific
high end application platform and they take care the performance and the efficiency of the system as
well as the software.

Operating System (OS)

Meaning and History
An operating system (OS) is a software program that manages the hardware and software
resources of a computer. The OS performs basic tasks, such as controlling and allocating memory,
prioritizing the processing of instructions, controlling input and output devices, facilitating networking,
and managing files. The first computers did not have operating systems. However, software tools for
managing the system and simplifying the use of hardware appeared very quickly afterwards and
gradually expanded in scope. By the early 1960s, commercial computer vendors were supplying quite
extensive tools for streamlining the development, scheduling, and execution of jobs on batch processing
systems. Examples were produced by UNIVAC (Universal Automatic Computer) and Control Data
Corporation, amongst others. An operating system is complex, so it is difficult to give a simple
universal definition of the operating system. Here some of the commonly used definitions are narrated.
An operating system is an interface between the hardware of a computer and the user (programs
or humans).
An operating system is a program (or a set of programs) that facilitates the execution of other programs.
An operating system acts as a general manager supervising the activity of each component in the
computer system.
Familiarizing with Personal Computer, Computer Architecture, Components 15

In a compact sense operating system is an interface between the hardware of a computer and the
user that facilitates the execution of other programs and the access to hardware and software and to
manage the resources.

Evolution of Operating System

Operating systems have gone through a long history of evolution which is explained below.
Batch Systems
Batch operating systems were designed in the 1950s to control mainframe computers. At that
time, computers were large machines that used punched cards for input, line printers for output and
tape drives for secondary storage media. Each program to be executed was called a job. The output for
each job would be separated and turned over to users in a collection area. This scenario clearly shows
that there was no interactivity. Users had no direct control. A programmer who wished to execute a
job sends a request to the operating system.
Time Sharing Systems
To use computer system resources efficiently, multiprogramming was introduced. The idea is to
hold several jobs in memory at a time, and only assign a resource to a job that needs it on the condition
that the resource is available.
Multiprogramming brought the idea of time sharing: resources could be shared between different
jobs, with each job being allocated a portion of time to use a resource. Because a computer is much
faster than a human, time sharing is hidden from the user—each user has the impression that the whole
system is serving them exclusively.
Personal Systems
When personal computers were introduced, there was a need for an operating system for this new
type of computer. During this era, single-user operating systems such as DOS (Disk Operating System)
were introduced.
Parallel System
The need for more speed and efficiency led to the design of parallel systems: multiple CPUs on
the same machine. Each CPU can be used to serve one program or a part of a program, which means
that many tasks can be accomplished in parallel instead of serially. The operating systems required for
this are more complex than those that support single CPUs.
Distributed System
A job that was previously done on one computer can now be shared between computers that may
be thousands of miles apart. Distributed systems combine features of the previous generation with new
duties such as controlling security.
Real Time Systems
A real time system is expected to do a task within a specific time constraint. They are used with
real time applications, which monitor, respond to or control external processes or environments.
16 Computer Application in Business Accounting

Application
(MS Word)

Operating system (Windows XP)

Hardware

RAM Hard Drive ROM BIOS Printer

Operating System Objectives

 Convenience
 Makes the computer more convenient to use
 Efficiency
 Allows computer system resources to be used in an efficient manner
 Ability to evolve
 Permit effective development, testing, and introduction of new system functions without
interfering with service
Layers of Operating System

End User

Programmer

Application Programs
Operating
system
Designer

Utilities

Operating System

Computer Hardware
Familiarizing with Personal Computer, Computer Architecture, Components 17

Characteristics of OS
Microkernel Architecture: Assigns only a few essential functions to the kernel, including
address spaces, inter process communication, and basic scheduling.
Multithreading: The process is divided into threads that can run simultaneously.
Thread: Unit of work. It includes a processor context program counter and stack pointer and its
own data storage for the stack. It executes sequentially and is interruptible.
Process: collection of one or more threads and associated system resources.
Symmetric Multiprocessing: Stand-alone computer with multiple processors that share the same
memory and I/O facilities connected by a communication bus. All processors can perform the same
functions.
Distributed Operating Systems provide the illusion of a single main memory and single
secondary memory space. Used for distributed file system.
Object-oriented Design are used for adding modular extensions to a small kernel. Enables
programmers to customize an operating system without disrupting system integrity.

Functions of Operating System

1. Operating System as a Resource Manager
Operating System also known as the Resource Manager means operating system manages all the
Resources those are attached to the System. All the resources like memory, processor and all the input
output devices attached to the computer system are managed by the operating system. The operating
system will identify at which time the CPU will perform which operation and in which Time the
Memory is used by which programs and which Input Device will respond to which Request of the user.
So this will manage all the resources those are attached to the Computer System.

2. Storage Management
Operating System controls all the storage operations mean how the data or files are stored into
the computers and how the files will be accessed by the users, etc. All the operations those are
responsible for storing and accessing the files is determined by the operating system Operating system
also allows us creation of files, creation of directories and reading and writing the data of files and
directories and also copy the contents of the files and the directories from one place to another place.

3. Process Management
The operating system also does the process management means all the processes those are given
by the user or the system‘s own processes are handled by the operating system. The operating system
will create the priorities for the user and also starts or stops the execution of the process and also
makes the child process after dividing the large processes into the small processes.
18 Computer Application in Business Accounting

4. Memory Management
Operating System also manages the memory of the computer system means provides the memory
to the process and also distributes the memory from the process. Virtual memory allocation and paging
are also two main activities of operating system.

5. Extended Machine
Operating System also behaves like an extended machine means operating system allows sharing
of files between multiple users, also provides some graphical environments and also provides various
languages for communications and also provides many complex operations like handling multiple
hardware and software.

6. File Management
A File system is normally organized into directories for easy navigation and usage. These
directories may contain files and other directions. Operating System does the following activities for
file management. Operating System keeps track of information, location, uses, status, etc. The
collective facilities are often known as file system.

7. Mastermind
Besides the above functions operating system also performs many functions and for those reasons
we can say that Operating System is a Mastermind. Without an operating system the system can’t run.
It provides facility to increase the logical memory of the computer system by using the physical
memory of the computer system and also provides various types of formats like NTFS and FAT File
Systems. And Operating System also controls the errors those have been occurred into the program
and also provides recovery of the system when the system gets damaged. When due to some hardware
failure, if system doesn’t work properly then operating system recovers the system and also corrects
the system and also provides the backup facility. System access permission, network user management,
firewall are also some of the functions of operating system.

8. Error Handling
Error can occur anytime and anywhere. Error may occur in CPU, in I/O devices or in the memory
hardware. Following are the major activities of an operating SYSTEM with respect to error handling.
OS constantly remains aware of possible ERRORS. OS takes the appropriate action to ensure correct
and consistent computing.

Types of Operating System

There are Many Operating Systems those have be developed for performing the operations those
are requested by the user. There are many operating systems which have the capability to perform the
requests those are received from the system. The operating system can perform a single operation and
also multiple operations at a time. So there are many types of operating systems those are organized by
using their working techniques.
1. Single-user Single Tasking Operating System
2. Single-user Multitasking Operating System
Familiarizing with Personal Computer, Computer Architecture, Components 19

3. Multiuser Multitasking Operating Systems

4. Real Time Operating Systems or Embedded Operating System
5. Distributed Operating System
6. Multiprocessing System
7. Parallel Operating systems
Serial Processing: The Serial Processing Operating Systems are those which performs all the
instructions in a Sequence Manner or the instructions those are given by the user will be executed by
using the FIFO Manner means First in First Out. All the instructions those are entered first in the
system will be executed first and the instructions those are entered later will be executed later. For
running the instructions the program counter is used which is used for executing all the instructions.
In this, the Program Counter will determine which instruction it is going to execute and which
instruction will be executed after this. Mainly the Punch Cards are used for this. In this all the Jobs are
firstly prepared and stored on the card and after that card will be entered in the system and after that all
the instructions will be executed one by one. But the main problem is that a user doesn’t interact with
the system while he is working on the system, means the user can’t be able to enter the data for
execution.
Batch Processing: The Batch Processing is same as the Serial Processing Technique. But in the
batch processing similar types of jobs are first prepared and they are stored on the card and that card
will submit to the system for processing. The system then perform all the operations on the
instructions one by one. And a user can’t be able to specify any input. And operating system will
increments program counter for Executing the next instruction.
The Main Problem is that the jobs those are prepared for execution must be the same type and if a
job requires for any type of input then this will not be possible for the user. And much time will be
wasted for preparing the batch. The batch contains the jobs and all those jobs will be executed without
the user intervention. And Operating System will use the LOAD and RUN operation. This will first
LOAD the job from the card and after that it will execute the instructions by using the RUN Command.
The speed of processing the job will depend on the jobs and the results those are produced by the
system in difference of time which is used for giving or submit the job and the time which is used for
displaying the results on the screen.

1. Single User Single Tasking Operating System

As the name implies, this operating system is designed to manage the computer so that one user
can effectively do one thing at a time. The palm OS for palm handheld computers is a good example
of a modern single user, single task operating system.

2. Single User Multitasking Operating System

This is the type of operating system most people use on their desktop and laptop computers today.
Microsoft’s Windows and Apple’s Mac OS platforms are both examples of operating systems that will
let a single user have several programs in operation at the same time. For example, it’s entirely
possible for a Windows user to be writing a note in a word processor while downloading a file from
the Internet while printing the text of an e-mail message.
20 Computer Application in Business Accounting

3. Multi-user Multitasking Operating System

As we know that in the Batch Processing System there are multiple jobs executed by the system.
The system first prepare a batch and after that it will execute all the jobs that are stored in the Batch.
But the main problem is that if a process or job requires an input and output operation, then it is not
possible and second there will be the wastage of the time when we are preparing the batch and the
CPU will remain idle at that time.
But with the help of Multiprogramming we can execute multiple programs on the system at a
time and in the multiprogramming the CPU will never get idle, because with the help of
multiprogramming we can execute many programs on the system and when we are working with the
program then we can also submit the second or another program for running and the CPU will then
execute the second program after the completion of the first program. And in this we can also specify
our input, means a user can also interact with the System.
The Multiprogramming Operating Systems never use any cards because the process is entered on
the spot by the user. But the Operating System also uses the process of allocation and de-allocation of
the memory means it will provide the memory space to all the running and all the waiting processes.
There must be the proper management of all the running jobs.

4. Real Time Operating System

Real time system is defined as a data processing system in which the time interval required to
process and respond to inputs is so small that it controls the environment. Real time processing is
always online whereas online system need not be real time. The time taken by the system to respond to
an input and display of required updated information is termed as response time. So in this method
response time is very less as compared to the online processing. Real time systems are used when there
are rigid time requirements on the operation of a processor or the flow of data and real time systems can
be used as a control device in a dedicated application. Real time operating system has well-defined,
fixed time constraints otherwise system will fail. For example, scientific experiments, medical imaging
systems, industrial control systems, weapons system, robots, and home appliance controllers, air traffic
control system, etc. They are frequently also referred to as embedded operating system.

5. Distributed Operating System

Distributed systems use multiple central processors to serve multiple real time application and
multiple users. Data processing jobs are distributed among the processors accordingly to which one
can perform each job most efficiently. The processors communicate with one another through various
communication lines (such as high-speed buses or telephone lines). These are referred as loosely
coupled systems or distributed systems. Processors in a distributed system may vary in size and
function. These processors are referred as sites, nodes, and computers and so on.
The advantages of distributed systems are following.
 With resource sharing facility user at one site may be able to use the resources available at
another.
 Speed up the exchange of data with one another via electronic mail.
 If one site fails in a distributed system, the remaining sites can potentially continue operating.
 Better service to the customers.
Familiarizing with Personal Computer, Computer Architecture, Components 21

 Reduction of the load on the host computer.

 Reduction of delay in data processing.

6. Multiprocessing
Generally a computer has a single processor, meaning a computer has just one CPU for
processing the instructions. But if we are running multiple jobs, then this will decrease the speed of
CPU. For increasing the speed of processing then we use the multiprocessing, in the Multiprocessing
there are two or more CPU in a Single Operating System if one CPU will fail, then other CPU is used
for providing backup for the first CPU. With the help of Multiprocessing, we can execute many jobs at
a time. All the operations are divided into the number of CPUs. if first CPU completed its work before
the second CPU, then the work of second CPU will be divided into the first and second.

7. Parallel Operating System

These are used to interface multiple networked computers to complete tasks in parallel. The
architecture of the software is often a UNIX-based platform, which allows it to coordinate distributed
loads between multiple computers in a network. Parallel operating systems are able to use software to
manage all of the different resources of the computers running in parallel, such as memory, caches,
storage space, and processing power. Parallel operating systems also allow a user to directly interface
with all of the computers in the network. A parallel operating system works by dividing sets of
calculations into smaller parts and distributing them between the machines on a network. To facilitate
communication between the processor cores and memory arrays, routing software has to either share
its memory by assigning the same address space to all of the networked computers, or distribute its
memory by assigning a different address space to each processing core. Sharing memory allows the
operating system to run very quickly, but it is usually not as powerful. When using distributed shared
memory, processors have access to both their own local memory and the memory of other processors;
this distribution may slow the operating system, but it is often more flexible and efficient.

Comparison of 32-bit OS and 64-bit OS

32-bit Processor
The 32-bit processor was the primary processor used in all computers until the early 1990s. Intel
Pentium processors and early AMD processors were 32-bit processors. The Operating System and
software on a computer with a 32-bit processor is also 32-bit based, in that they work with data units
that are 32 bits wide. Windows 95, 98, and XP are all 32-bit operating systems that were common on
computers with 32-bit processors.
Note: A computer with a 32-bit processor cannot have a 64-bit version of an operating system
installed. It can only have a 32-bit version of an operating system installed.

64-bit Processor
The 64-bit computer has been around since 1961 when IBM created the IBM 7030 Stretch
supercomputer. However, it was not put into use in home computers until the early 2000s. Microsoft
released a 64-bit version of Windows XP to be used on computers with a 64-bit processor. Windows
Vista, Windows 7, and Windows 8 also come in 64-bit versions. Other software has been developed
22 Computer Application in Business Accounting

that is designed to run on a 64-bit computer, which is 64-bit based as well, in that they work with data
units that are 64 bits wide.
Note: 1. A computer with a 64-bit processor can have a 64-bit or 32-bit version of an operating system
installed. However, with a 32-bit operating system, the 64-bit processor would not run at its
full capability.
2. On a computer with a 64-bit processor, you cannot run a 16-bit legacy program. Many 32-bit
programs will work with a 64-bit processor and operating system, but some older 32-bit
programs may not function properly, or at all, due to limited or no compatibility.

Central Processing Unit (CPU)

The central processing unit pronounced as CPU is the brains of the computer. It comprises of
ALU (arithmetic logic unit), control unit (CU) and memory unit (MU). The ALU is responsible for the
number crunching, and the CU is responsible for instruction sequencing and branching and memory
unit is responsible for memory allocation. Modern microprocessors and microcontrollers provide on a
single chip the CPU and a varying degree of additional components, such as counters, timing co
processors, watchdogs, SRAM and flash ROM. On large machines, CPUs require one or more printed
circuit boards. On personal computers and small workstations, the CPU is housed in a single chip
called a microprocessor.

Arithmetic Logic Unit

The first major component of any CPU is the ALU (arithmetic logic unit). It is the number
cruncher of a CPU, supplying basic arithmetic operations such as addition and subtraction (in more
advanced ALUs also multiplication and division) and logic operations such as AND, OR, greater than,
less than and NOT for data words of a specific width. In fact, one can imagine the ALU as a small
calculator inside the CPU. One of the most important decisions to make when designing an ALU is
how many registers to use and how many operands to receive from memory per instruction. For our
first ALU we will use the simplest possible case: one register and one operand per instruction. This is
called a one-address machine (assuming the operand is in fact an address – more about this later).
Since here each instruction has only one operand, we need to use some intermediate steps when, e.g.,
adding two numbers. In the first step we load the first operand into the register (which we will call
accumulator from now on). In the second step, we add the second operand to the accumulator. ALUs
that can perform this operation in a single step are called two-address machines. Each of their
instructions can supply two operands (e.g. a + b) and the result will be stored in the accumulator.

Control Unit
The CU (control unit) is the second part of the CPU, enabling step-by-step program execution
and branching. The control unit interprets any instruction it receives from memory and directs the
sequences of events necessary to execute the instruction. Control unit uses a system clock which
synchronizes all tasks by sending out electrical pulses. The clock speed (the number of pulses or
cycles per second) is measured in megahertz now in gigahertz and is the main element in determining
the speed of the processor. The central register used in the CU is the program counter. The program
counter addresses the memory in order to load opcodes and operands (immediate data or memory
Familiarizing with Personal Computer, Computer Architecture, Components 23

addresses) from memory. The control unit communicates with other parts of computer hardware. It
sends data and instruction from secondary storage to memory as needed.

The CPU structure is shown below

CONTROL UNIT

PRIMARY STORAGE UNIT

INPUT PROGRAM OUTPUT

STORAGE STORAGE STORAGE
AREA AREA AREA
WORKING
STORAGE
AREA

ARITHMETIC-LOGIC UNIT

Main Components of CPU

Control Unit Arithmetic Logic Unit Memory Unit

Arithmetic Operations Logical Operations RAM ROM

24 Computer Application in Business Accounting

Stores data and programs

Secondary storage

Makes
Sends data to processed
the central Central processing unit
information
processing unit available
Control Arithmetic/
Input unit logic unit Output

Memory

Processing

Registers
The registers are known as single storage locations present within the CPU used for particular
purpose. They are used to hold binary value temporarily. Each register is wired within the CPU
directly (no address needed) for specific function. They hold data, instruction being processed. The
memory or input output addresses being accessed. The registers are of two types i.e. general purpose
registers, specific purpose registers.

General Purpose Registers

 User-visible registers
 Part of ALU
 Accumulators
 Typically several dozen in modern CPUs (R0, R1,)
 Hold data of arithmetic operations
 Hold intermediate results or data values, e.g., loop counters
 To transfer data between different memory locations and between I/0 and memory

Specific Purpose Registers

 Part of CU
 Program Counter Register (PC) (instruction pointer)
 Holds address of the currently executed instruction
 Instruction Register (IR)
 Holds the actual instruction being executed
 Memory Address Register (MAR) – contains address in memory to find or place data
Familiarizing with Personal Computer, Computer Architecture, Components 25

 Holds the address of a memory location

 Memory Data Register (MDR) – contains actual data to be place in location given MAR or
which has been retrieved from location given in MAR. It is a two way register.
 Holds the actual data value from location specified in MAR
 Flags (one-bit register) to track special conditions like arithmetic carry and overflow, power
failure, internal computer error
 Status Registers
 Several flag registers grouped together

Program Counter
 A dedicated register in the CPU
 Contains the address in memory of the current instruction being executed.
 Incremented automatically after each instruction.
 May be forced to change
 Usually initialized to zero when machine starts, or is reset.

Accumulator
 A dedicated register or set of registers in the CPU used for the actual manipulation of data
 Usually contains results of arithmetic or logical operations.

How the CPU Executes Program Instructions

Let us examine the way the central processing unit, in association with memory, executes a
computer program. We will be looking at how just one instruction in the program is executed. In fact,
most computers today can execute only one instruction at a time, though they execute it very quickly.
Many personal computers can execute instructions in less than one-millionth of a second, whereas
those speed demons known as supercomputers can execute instructions in less than one-billionth of a
second.

Control unit Arithmetic/

logic unit Central
2
Decode 3 processing
1 Execute
4 unit
Fetch Store

Memory
26 Computer Application in Business Accounting

Before an instruction can be executed, program instructions and data must be placed into memory
from an input device or a secondary storage device (the process is further complicated by the fact that,
as we noted earlier, the data will probably make a temporary stop in a register). As the Figure shows,
one the necessary data and instruction are in memory, the central processing unit performs the
following four steps for each instruction:
The control unit fetches (gets) the instruction from memory.
1. The control unit decodes the instruction (decides what it means) and directs that the
necessary data be moved from memory to the arithmetic/logic unit. These first two steps
together are called instruction time, or I-time.
2. The arithmetic/logic unit executes the arithmetic or logical instruction. That is, the ALU is
given control and performs the actual operation on the data.
3. The arithmetic/logic unit stores the result of this operation in memory or in a register. Steps
3 and 4 together are called execution time, or E-time.

E-time
Execution: Control Unit moves the data from memory to registers in the ALU. Then ALU is
given control and executes the instruction. After that control returns to the Control unit. CU stores the
result of the operation in memory or in a register.
The control unit eventually directs memory to release the result to an output device or a
secondary storage device. The combination of I-time and E-time is called the machine cycle.
It is one thing to have instructions and data somewhere in memory and quite another for the
control unit to be able to find them. How does it do this?
The location in memory for each instruction and each piece of data is identified by an address.
That is, each location has an address number, like the mailboxes in front of an apartment house. And,
like the mailboxes, the address numbers of the locations remain the same, but the contents
(instructions and data) of the locations may change. That is, new instructions or new data may be
placed in the locations when the old contents no longer need to be stored in memory. Unlike a mailbox,
however, a memory location can hold only a fixed amount of data; an address can hold only a fixed
number of bytes - often two bytes in a modern computer.
Familiarizing with Personal Computer, Computer Architecture, Components 27

Figure shows how a program manipulates data in memory. A payroll program, for example, may
give instructions to put the rate of pay in location 3 and the number of hours worked in location 6. To
compute the employee’s salary, then, instructions tell the computer to multiply the data in location 3
by the data in location 6 and move the result to location 8. The choice of locations is arbitrary - any
locations that are not already spoken for can be used. Programmers using programming languages,
however, do not have to worry about the actual address numbers, because each data address is referred
to by a name. The name is called a symbolic address. In this example, the symbolic address names are
Rate, Hours, and Salary.

System Clock
 System clock produces pulses at a fixed rate
 Each pulse is one Machine Cycle
 One program instruction may actually be several instructions to the CPU
 Each CPU instruction will take one pulse
 CPU has an instruction set – instructions that it can understand and process

Differences between a 32-bit and 64-bit CPU

A big difference between 32-bit processors and 64-bit processors is the number of calculations
per second they can perform, which affects the speed at which they can complete tasks. 64-bit
processors can come in dual core, quad core, six core, and eight core versions for home computing.
Multiple cores allow for an increased number of calculations per second that can be performed, which
can increase the processing power and help make a computer run faster. Software programs that
require many calculations to function smoothly can operate faster and more efficiently on the multi-
core 64-bit processors, for the most part.
Another big difference between 32-bit processors and 64-bit processors is the maximum amount
of memory (RAM) that is supported. 32-bit computers support a maximum of 3-4GB of memory,
whereas a 64-bit computer can support memory amounts over 4 GB. This is important for software
programs that are used for graphical design, engineering design or video editing, where many
calculations are performed to render images, drawings, and video footage.
One thing to note is that 3D graphic programs and games do not benefit much, if at all, from
switching to a 64-bit computer, unless the program is a 64-bit program. A 32-bit processor is adequate
for any program written for a 32-bit processor. In the case of computer games, you’ll get a lot more
performance by upgrading the video card instead of getting a 64-bit processor.
In the end, 64-bit processors are becoming more and more commonplace in home computers.
Most manufacturers build computers with 64-bit processors due to cheaper prices and because more
users are now using 64-bit operating systems and programs. Computer parts retailers are offering
fewer and fewer 32-bit processors and soon may not offer any at all.

Computer Memory or Storage

The computer memory is divided into two types, viz., Primary memory or storage and Secondary
memory or storage.
28 Computer Application in Business Accounting

Primary Memory or Storage

Random Access Memory (RAM)
The name random access memory is an artifact of hardware evolution. Random access means
that the stored data can be accessed in any order, which is in contrast to the more restricted access
provided by other memory systems, such as tape and disk drive. The access time to any piece of data
stored on in RAM is essentially the same. RAM is normally used in computer systems for main
memory or primary storage. This is where running programs and the data they use are stored. Moving
data from primary storage to the processor requires only a few cycles, although retrieving data from a
hard drive can take considerable longer. For this reason, modern operating systems run primarily in
RAM, and as they load and run additional applications, they move these programs and their data into
RAM for faster processing. RAM can be categorized as volatile or non-volatile. Volatile means that all
data is lost when the chip is powered down. Historically, non-volatile RAM was a tiny part of the
market, although consumer electronics have changed that situation. When referring to computer
systems, most RAM remains volatile.
Dynamic RAM
Most computers incorporate two types of volatile RAM: static and dynamic. Although both types
require constant electrical current to function, they have some important differences. Dynamic RAM is
less expensive, and therefore it is the most widely used. When a computer is said to have 512
megabytes or one gigabyte of RAM, the specification refers to dynamic RAM (DRAM). DRAM stores
each bit of information in a separate capacitor on the integrated circuit. The DRAM chip requires only
one transistor and one capacitor for each bit of storage. This makes it both cheap and space efficient.
One disadvantage with using capacitors for storage is that they gradually dissipate their charge, so the
charge must be refreshed regularly (current specifications are for the refresh to occur every 64
milliseconds or less). This refresh requirement is what makes this technology dynamic. DRAM also
suffers periodic access limitations, because it cannot be read during the refresh cycle. One specialized
type of DRAM is more common is embedded DRAM, or EDRAM. EDRAM is DRAM integrated
onto the same chip as the processor and used as cache memory. This is a common solution in gaming
consoles, and it will likely become a staple in embedded systems.
Static RAM (SRAM)
Static RAM (SRAM) has the advantage of being faster than DRAM, although the disadvantage is
that it is more expensive. SRAM is static in the sense that it doesn’t require constant electrical
refreshes; however, it still requires constant current to maintain the voltage differentials. SRAM
generally requires less power than DRAM, although its power requirements vary depending on clock
speed. At higher clock speeds, it can use as much power as DRAM; however, at more moderate speeds,
it requires only a fraction of what DRAM uses. When idle, SRAM power requirements are low. Each
bit in a SRAM chip requires a cell of six transistors, although DRAM needs only one transistor and
one capacitor. This means that SRAM cannot achieve the storage densities of the DRAM family. As
with DRAM, SRAM chips are mostly large arrays of these cells of transistors. The two primary
applications of SRAM are embedded use and in computers. Embedded use refers to SRAM use in
automotive and consumer electronics, industrial equipment, and almost all appliances or toys with an
electronic user interface. Devices, such as cell phones and music synthesizers, can incorporate several
megabytes of SRAM. SRAM in computer systems is usually delegated to roles where a small amount
Familiarizing with Personal Computer, Computer Architecture, Components 29

of high speed memory is required, such as processor caches and I/O buffers. Printers and liquid crystal
displays (LCDs) often use SRAM to buffer images. SRAM is also widely used in networking devices,
such as routers, switches, and cable modems, to buffer transmitted information.
Feature DRAM SRAM
Storage Circuit Capacitors Flip flops
Transfer Speed Slower than CPU Same as CPU
Access Time High Low
Density High Low
Power Consumption Low High
Cost Cheap Expensive

Read Only Memory (ROM)

Non-volatile memory retains data even when not powered. The two common types of non-
volatile memory are read only memory and flash memory. There are several types of read only
memory (ROM), although most are obsolete. These ROMs are called read only because they cannot be
modified by the casual user (and some types cannot be modified at all). ROMs have traditionally been
used in computer systems to store configuration data, such as bootstrap or BIOS code, which requires
fast access. The first ROMs were mask-programmed ROMs, which had 1s and 0s actually burned into
the integrated circuit. This technique was simple but inflexible, and it was often used to contain the
startup code (bootstrap) for early microcomputers. Mask ROM is now obsolete. The Programmable
Read Only Memory (PROM) was the next step. The PROM is a memory array consisting of a grid of
fuses. Typically, the blank PROM comes with all bits set to 1. During programming, the fuses that
represent the zero bits are blown by the programming device, which sends high voltage pulses to
destroy individual fuses. The PROM is a cheaper and more flexible approach than mask ROM,
although each PROM can still be programmed only once. PROMs are reliable, permanent, and
relatively fast. They are still in limited use; however, they have largely been supplanted by erasable
versions of ROM. The erasable programmable read only memory, or EPROM, was the next step.
EPROM uses arrays of floating gate transistors, which are programmed higher voltage pulses much
like PROMs. EPROMs, however, can be erased by exposure to strong ultraviolet light and
programmed again. EPROM chips usually have a distinctive transparent quartz window on the top of
the chip that exposes the transistors to the UV light. EPROM chips preserve their data for roughly10
to 20 years and allow for an unlimited number of reads. The erasing window is kept covered by a foil
label to prevent erasure by exposure to sunlight. The most popular use of EPROMs in computer
systems was to store the BIOS in older PC systems. The electronically erasable programmable read
only memory (EEPROM) has largely supplanted all other types of ROM in the current generation of
computing devices. The capacity of EEPROMs ranges up to hundreds of kilobits. This is now the
preferred technology for storing the BIOS in personal computers. As the term electronically erasable
implies, EEPROMs can be erased and rewritten, usually by creating a high-voltage pulse on the chip.
This rewriting eventually damages the layer of insulating material on the chip, so the number of writes
is limited. Although early models would fail after 100 write-erase cycles, current EEPROMs can
sustain one million write-erases or more.
30 Computer Application in Business Accounting

RAM ROM
Definition Random Access Memory or RAM is a form of data Read-only memory or ROM is
storage that can be accessed randomly at any time, in also a form of data storage that
any order and from any physical location., allowing can not be easily altered or
quick access and manipulation. reprogrammed.Stores instuctions
that are not nescesary for re-
booting up to make the
computer operate when it is
switched off.They are
hardwired.
Stands for Random Access Memory Read-only memory
Use RAM allows the computer to read data quickly to run ROM stores the program
applications. It allows reading and writing. required to initially boot the
computer. It only allows
reading.
Volatility RAM is volatile i.e. its contents are lost when the It is non-volatile i.e. its contents
device is powered off. are retained even when the
device is powered off.
Types The two main types of RAM are static RAM and The types of ROM include
dynamic RAM. PROM, EPROM and EEPROM.

Cache Memory
Cache memory is faster than main memory, but slower than the CPU and its registers. Cache
memory, which is normally small in size, is placed between the CPU and main memory. CPU requests
contents of memory location. Cache is checked for this data. If present, get from cache (fast). If not
present, read required block from main memory to cache. Then deliver from cache to CPU. Cache
includes tags to identify which block(s) of main memory are in the cache. Cache memory is of three
types viz. Direct Cache Memory, Associate Cache Memory, Set Associative cache memory.

Virtual Memory
As we know a computer is designed for performing multiple tasks at a time and for this some
memory is also used by the computer for executing the instructions those are given by the user. But
when there is a situation when the memory (RAM) which is required by the user is high from the
available memory then the concept of Virtual Memory comes. In the Virtual Memory the Physical
Familiarizing with Personal Computer, Computer Architecture, Components 31

Memory (Hard Disk) will be treated as the Logical Memory. It means with the help of virtual Memory
we can also increase the size of Logical Memory as from the Physical Memory. In other word when
the primary memory, i.e., RAM is fully consumed by the programs ready for execution then the
operating system creates some space in the secondary storage device, i.e., hard disk and transfers some
idle programs from RAM. As a result some free space is created to hold the current or new programs
given by the user. This process of shifting idle programs to virtual memory is known as paging. The
various benefits of the virtual Memory are:
1. Unused Address Space: With the help of unused address space a user can execute any
number of programs because all the actual addresses will be treated as the logical addresses.
All the programs those are given by the user will be stored into the disk space and all the
programs will be stored into the physical address space but they will treat as they are stored
into the logical address space.
2. Increased Degree of Multiprogramming: With the help of virtual memory we can execute
many programs at a time because many programs can be fit in the physical memory So that
more programs can be stored into the memory but this will not increase the response time of
the CPU means this will not affect on the execution of the programs.
3. Decrease Number of I/O Operations: There will be less operations those are to be used for
performing the swapping of the processes. All the programs will be automatically will be
loaded into the memory when they are needed.

Connecting CPU and Memory

The CPU and memory are normally connected by three groups of connections, each called a bus:
data bus, address bus and control bus.

Connecting Input Output Devices

Input Output devices cannot be connected directly to the buses that connect the CPU and memory,
because the nature of I/O devices is different from the nature of CPU and memory. Input Output
devices are electromechanical, magnetic, or optical devices, whereas the CPU and memory are
electronic devices. I/O devices also operate at a much slower speed than the CPU/memory. There is a
need for some sort of intermediary to handle this difference. Input/output devices are therefore
attached to the buses through input/output controllers or interfaces. There is one specific controller for
each input/output device.
32 Computer Application in Business Accounting

Input Output Operation

Commands are required to transfer data from I/O devices to the CPU and memory. Because I/O
devices operate at much slower speeds than the CPU, the operation of the CPU must be somehow
synchronized with the I/O devices. Three methods have been devised for this synchronization. They are:
1. Programmed I/O
2. Interrupt driven I/O
3. Direct memory access (DMA).

Secondary Memory or Auxiliary Memory or Storage

The computer usually uses its input/output channels to access secondary storage and transfers the
desired data using intermediate area in primary storage. Secondary storage does not lose the data when
the device is powered down—it is non-volatile. Per unit, it is typically also an order of magnitude less
expensive than primary storage. The secondary storage is often formatted according to a file system
format, which provides the abstraction necessary to organize data into files and directories, providing
also additional information (called metadata) describing the owner of a certain file, the access time,
the access permissions, and other information. Hard disk is usually used as secondary storage. The
information stored in such devices are first transferred to main memory and then processed by the
CPU. Then the final result may be placed in secondary memory. The magnetic tape, magnetic disk,
pen drives, memory cards and DVDs are known as auxiliary storage device.

Memory Capacity or Power

All computers work on a binary numbering system, i.e. they process data in one’s or zero’s. This
1 or 0 level of storage is called a bit. Other units are byte, kilobyte, megabyte, gigabyte, terabyte and
petabyte. The relations between all these units of measurement are as follows.
8 bits = 1 byte
1024 bytes = 1 kilobyte
1024 kilobytes (KB) = 1 megabyte
1024 megabytes (MB) = 1 gigabyte
Familiarizing with Personal Computer, Computer Architecture, Components 33

1024 gigabytes (GB) = 1 terabyte

1024 terabytes (TB) = 1 petabyte (PB)
Size in “bytes”
1 Kilobyte (KB) = 1,024bytes
1 Megabyte (MB) = 1,048,576 bytes
1 Gigabyte (GB) = 1,073,741,824 bytes
1 Terabyte (TB) = 1,099,511,627,776 bytes
1 Petabyte (PB) = 1,125,899,906,842,624 bytes

Microprocessor
A microprocessor chip — also known as a central processing unit (CPU) — is a complete
computation engine of computers, embedded systems or other electronic devices. A chip is also called
an integrated circuit, which can contain millions of transistors. Someone who processes things is a
processor. It is the part of a computer that does all data processing. A microprocessor or processor is
the heart of the computer and it performs all the computational tasks, calculations and data processing
etc. inside the computer. Microprocessor is the brain of the computer. In the computers, the most
popular type of the processor is the Intel Pentium chip. A microprocessor chip — also known as a
central processing unit (CPU) — is a complete computation engine of computers, embedded systems
or other electronic devices. A chip is also called an integrated circuit, which can contain millions of
transistors. Computers CPUs (processors) are composed of thin layers of thousands of transistors.
Transistors are tiny, nearly microscopic bits of material that will block electricity when the electricity
is only a weak charge, but will allow the electricity pass through when the electricity is strong enough.
The first microprocessor was the Intel 4004, introduced in 1971. The first microprocessor used in
home computer was Intel 8080 a complete 8 bit computer on one chip, introduced in 1974. A
microprocessor executes a collection of machine instructions that tell the processor what to do. Based
on the instructions, a microprocessor does three basic things:
 Performs mathematical operations and modern microprocessors contain complete floating
point processors that can perform extremely sophisticated operations on large floating point
numbers.
 Moves data from one memory location to another.
 Makes decisions and jump to a new set of instructions based on those decisions.
The Microprocessor’s Power
The power of a microprocessor is measured in bits. The more bits, the more information (data)
the microprocessor is capable of bandying about and, therefore, the more powerful the microprocessor.
Specifically, an 8-bit CPU can add/subtract/multiply/etc. two 8-bit numbers, while a 32-bit ALU can
manipulate 32-bit numbers. An 8-bit arithmetic logic unit (ALU) would have to execute four
instructions to add two 32-bit numbers, while a 32-bit ALU can do it in one instruction.In a way, the
number of bits can be compared to lanes on a freeway: If you have only two lanes, too many cars
congest traffic, and things slow down. A six-lane freeway, however, has plenty of room for lots of cars,
and traffic flows smoothly. With more bits, just as with more lanes on a freeway, the microprocessor
can do more powerful programming, operations and processes.
34 Computer Application in Business Accounting

Microprocessor Speed
Technically, microprocessor speed is measured in hertz, or cycles per second. Microprocessors
are capable of doing billions of things in one second. Therefore, their speed is measured in gigahertz
(GHz). A microprocessor that can do 1 billion things per second is rated at 1.0 GHz. A microprocessor
that can do 3.66 billion things per second is rated at 3.66 GHz. This rate is much faster than 1.0 GHz.
The higher the speed value, the faster the chip. And, naturally, the faster the chip, the more you can do
in a given amount of time.
Trends
The trend in processor design has primarily been toward full 32-bit ALU with fast floating point
processors built in and pipelined execution with multiple instruction streams. The ARM architecture
(previously, the Advanced RISC Machine) is a 32-bit RISC processor architecture developed by ARM
Limited that is widely used in a number of embedded designs. Because of their power saving features,
ARM CPUs are dominant in the electronics market where low power consumption is a critical design
goal. Today, the ARM family accounts for over 75% of all 32-bit embedded CPUs, making it one of
the most prolific 32-bit architectures in the world.
Digital Signal Processor (DSP)
In many applications, general-purpose microprocessors (such as the 32-bit ARM) and a digital
signal processor (DSP) have distinct roles. The microprocessor and memory takes care of
mathematical operations, housekeeping tasks for communications with host and interface with other
peripherals. The DSP receives input signals and performs tasks that enhance the performance and
quality of the system and data such as reflective phase analysis, filtering, noise reduction, modulation,
demodulation, encryption, decoding and encoding.
A DSP is a specialized microprocessor designed specifically for digital signal processing,
generally in real time computing. These process signals are generally purpose-designed application-
specific integrated circuits (ASICs). When flexibility and rapid development are important at high
volume, DSP algorithms may also be implemented using field-programmable gate arrays (FPGAs).
Since many applications require rapid processing and feedback, engineers often choose DSPs for
their speed. Relevant real time applications that benefit from DSPs include weather forecasting, flood
warning, digital image processing, digital communications, data acquisition, control and industrial
processes.

Measuring Speed: Bits, Cycles and Execution Cores

CPU Bit Width
The first way of describing a processor is to say how many bits it processes in a single instruction
or transports across the processor’s internal bus in a single cycle (not exactly correct, but close
enough). The number of bits used in the CPU’s instructions and registers and how many bits the buses
can transfer simultaneously is usually expressed in multiples of 8 bits. It is possible for the registers
and the bus to have different sizes. Current chip designs are 64 bit chips (as of 2008).More bits usually
mean more processing capability and more speed.
Familiarizing with Personal Computer, Computer Architecture, Components 35

CPU Clock Cycles

The second way of describing a processor is to say how many cycles per second the chip operates
at. This is how many times per second a charge of electricity passes through the chip. The more cycles,
the faster the processor. Currently, chips operate in the billions of cycles per second range. When
you’re talking about billions of anything in computer terms, you’re talking about ‘giga’ something.
When you’re talking about how many cycles per second, you are talking about ‘hertz’. Putting the two
together, you get gigahertz. More clock cycles usually means more processing capability and more
speed.

CPU Execution Cores

The third way of describing a processor is to say how many execution cores are in the chip. The
most advanced chips today have eight execution cores. More execution cores means you can get more
work done at the same time, but it doesn’t necessarily mean a single program will run faster. To put it
another way, a processor with one execution core might be able to run your MP3 music, your web
browser, a graphics program and that’s about where it starts to slow down enough, it’s not worth it
running more programs. A system with a processor with 8 cores could run all that plus ten more
applications without even seeming to slow down (of course, this assumes you have enough RAM to
load all of this software at the same time).
More execution core means more processing capability, but not necessarily more speed. The
most advanced processors available are 64-bit processors with 8 cores, running as fast as 3-4 gigahertz.
Intel has released quad-core 64-bit chips as has AMD.

Multiprocessor (Multi-CPU) Computers

And if you still need more processing power, some computers are designed to run more than one
processor chip at the same time. Many companies that manufacture servers make models that accept
two, four, eight, sixteen even thirty two processors in a single chassis. The biggest supercomputers are
running hundreds of thousands of quad-core processors in parallel to do major calculations for such
applications as thermonuclear weapons simulations, radioactive decay simulations, weather
simulations, high energy physics calculations and more.

CPU Speed Measurements

The main measurement quoted by manufacturers as a supposed indication of processing speed, is
the clock speed of the chip measured in hertz. The theory goes that the higher the number of mega or
gigahertz, the faster the processor. However comparing raw speeds is not always a good comparison
between chips. Counting how many instructions are processed per second (MIPS, BIPS, TIPS for
millions, billions and trillions of instructions per second) is a better measurement. Still others use the
number of mathematical calculations per second to rate the speed of a processor. The speed of the
microprocessor is measured in the MHz or GHz. The processor is also known as the CPU (Central
Processing Unit). It contains the control unit and the arithmetic unit and both works together to
process the commands. CPU is designed to perform the arithmetic and logical operations inside the
computer. Common operations inside the computer include adding, subtracting, multiplying,
comparing the values and fetching the different numbers to process them. The higher the CPU
clocks’ speed the more efficient will be the performance of the computer. A computer CPU is
36 Computer Application in Business Accounting

composed of millions (and soon billions) of transistors. Because CPU’s are so small, they are often
referred to as microprocessors. So, the terms processor, microprocessor and CPU are interchangeable.

Microprocessor Organization
Although microprocessors are becoming increasingly complex, at root its operation can be
summed up as the repeated sequence of simple tasks: Fetch an instruction; Decode the instruction;
Execute the instruction. Each microprocessor recognizes a unique set of binary instructions which
have been predefined and stored permanently in the chip. When the CPU receives an instruction it
passes it to a unit known as the Decode unit which contains a sequence of operations which must be
performed to complete the operation. The Decode unit passes the sequence of instructions to the
Control Unit which holds tiny programs known as microcode for each operation the microprocessor
had been designed to carry out.
The actual work of the microprocessor is carried out in the Arithmetic Logic Unit. Most of these
operations are in fact performed by addition. To perform subtraction, the CPU first finds the
complement of the number to be subtracted and then adds the two numbers. Multiplication and
division can be performed by carrying out multiple addition or subtraction operations. To compare two
numbers, the CPU will subtract them and then check to see if there is a remainder, and so on. In order
to carry out its operations, the processor has storage locations, called registers, for the numbers and
instructions it is operating on. For example, to add two numbers, the first number may be loaded into
Register A, the second into Register B and the result stored in Register C. To speed up the operations
of the processor, the Prefetch unit looks ahead in the program to find the next instructions and preloads
them into registers, to cut down on time wasted waiting for the next instruction.

The microprocessor connects to the external components of the computer via “buses”: sets of
parallel conductors used to move data in the form of electrical pulses. There are three types of buses:
the data bus carries the binary-coded information and instructions; the address bus carries binary-
coded numbers which identify storage locations in main memory, much like the postal code on a letter;
the control bus carries timing signals, read-write signals, interrupt requests and similar signals between
the microprocessor and external devices.
Familiarizing with Personal Computer, Computer Architecture, Components 37

To manage the flow of data into and out of the CPU, two other units are required: the Memory
Management Unit, and the Bus Management Unit. To summarize, the essential sections of a
microprocessor are:
 Arithmetic Logic Unit executes all logic and arithmetic operations as specified by the
instruction set
 Control Unit contains the microcode that tells the ALU how to function.
 Decode Unit translates instruction into control signals and microcode directions then queues
them until requested by the Control Unit.
 Prefetch Unit queues instruction to assure that the microprocessor is in continuous operation.
 Memory Management Unit converts internal logic addresses into external memory
addresses.
 Bus Management Unit manages the flow of information between the microprocessor and
data storage locations (main disk, CD-ROM, etc.) and peripherals (printer, monitor, etc.)

CPU Manufacturers
 American Micro Devices (AMD)
 Intel
 IBM
 Motorola
 Cyrix
 Texas Instruments
38 Computer Application in Business Accounting

CENTRAL PROCESSING UNIT

Control Unit

Add Instruction
Step 1
Move instruction to
the control unit.
Step 3
The control unit
Let X = N1 + N2
signals the ALU to
perform “addition” on
Memory the two numbers and
locations to store the result in
Number 1 (N1) the accumulator.
Number 2 (N2)
Step 2
Result X The two
numbers are
Memory Unit brought from
memory and Number 1
placed in the
ALU.
Number 2

Result
Step 4
Put result in (Accumulator)
memory.
A/L Unit

Sample Questions
1. Make a comparison study of different generations of computer.
2. How Computers are classified ? Brief the classification based on application.
3. Write short notes on
(a) General purpose Computer
(b) Specific purpose Computer
(c) Super Computer
(d) Hybrid Computer
(e) Fourth Generation of computers
4. Elucidate the characteristics, applications and limitations of computers.
5. Write short notes on
Familiarizing with Personal Computer, Computer Architecture, Components 39

(a) Hardware
(b) Software
6. Make a comparison study of Application software and system software.
7. What is an operating system? What are the different types of operating systems? Explain the
functions of an Operating system.
8. Briefly discuss what are the different types of operating system are present
9. Write short notes on
(a) Machine Language
(b) Assembly Language
10. Write short notes on
(a) Arithmetic Logic Unit
(b) Control Unit
11. What is Random Access Memory? Brief different types of RAMs are available.
12. Distinguish between
(a) RAM and ROM.
(b) Cache Memory & Virtual Memory
13. Brief on microprocessor and its architecture
14. What are 32bit & 64 bit processors? How they are different from each other?
15. Briefly explain how an instruction is processed by microprocessor.

